Michigan

Home sales drop 23 percent in Midwest in November

KANSAS CITY, Mo. - Existing home sales in the Midwest tumbled 23 percent in November compared with a year ago as accelerated job losses, Wall Street weakness and dwindling consumer confidence forced more people out of the housing market, the National Association of Realtors said Tuesday.

In the Midwest, home sales fell in all 12 major metro areas tracked in The Associated Press-Re/Max Monthly Housing Report, also released Tuesday. The report analyzed home sales recorded by all real estate agents, regardless of company affiliation, in the metropolitan statistical areas.

The November median sales price fell compared with last year in 11 cities in the AP-Re/Max report. The biggest declines came in Detroit, Cleveland and Minneapolis.

The lone city bucking the trend was Des Moines, Iowa, where prices nudged up 1.4 percent to a median of $152,000. But home sales tumbled 34.5 percent.

"The (lower) interest rates aren't helping as much as we had hoped," said Russ Graber, a Des Moines agent with Coldwell Banker. "My guess is you're going to see more refinancing than people moving. I don't think people are going to want to put on more debt."

Graber said he's seen both ends of the spectrum. He recently sold a $400,000 unfinished home for $250,000. Meanwhile, his office has also sold two $500,000 homes near their list prices in the same weekend.

"There's no rhyme or reason," he said.

The St. Louis region again topped the list in the Midwest for biggest sales drop. Sales in the Metropolitan Statistical Area plummeted 58 percent, while the median sales price declined 14.3 percent to $124,250.

Jim Moll, a real estate agent with Coldwell Bankers in St. Louis, said he hadn't seen the huge drop in sales indicated by the AP-Re/Max survey, but agreed the market has gotten tougher.

"If they're looking for a home in the current economy, they must be secure of their employment situation and they want to take advantage of the prices and take advantage of the interest rates," Moll said.

Glenn MacDonald, professor of economics and strategy at Washington University in St. Louis, said the region's economy is less volatile than in other parts of the country, which may explain why in times of economic stress the housing market dries up so dramatically. Essentially, he said, stable businesses experience fewer layoffs or other relocations, which spawn fewer desperation sales.

"If you're thinking about buying or selling a house, that's a very delayable decision," MacDonald said. "If the economy is soft, you may decide, 'Well, I can wait to buy a house or sell a house.' Only people who have to sell are going to be in the market."

That has become a constant refrain for Rose Marie Jouan, a real estate agent with Prudential Cranbrook in suburban Detroit, where the median sales price fell 49 percent to $55,000 in November, the largest drop in the country.

"I'm usually very honest in telling people if there's no critical reason to move right now, stay put," Jouan said. "They can't put a sale price on their home because they're competing with bank-held homes, foreclosures, short sales (where lenders accept less than the remaining mortgage on a home), relocated families."

The depressed prices have lured bargain hunters, however, leading home sales in Detroit to dip only 3 percent in November, the smallest amount among Midwest markets in the AP-Re/Max report.

"Financing is a lot easier to get than people think it is," Jouan said. "I think the news is driving away some people who would be able to get a loan."

Ann Marsh-Senic was among those who took advantage of the lower prices, buying a foreclosed house in the Detroit suburb of Royal Oak for about half what it was worth. She said she made offers on homes that weren't in foreclosure but couldn't get the owners to negotiate on the price.

"I think there are a lot of people who have their houses on sale who don't realize how low the market is right now," she said.

Omaha saw the second-highest drop in sales in the AP-Re/Max report, falling 45 percent. The median sales price, however, dipped only 2.6 percent to $133,500.

Chicago, the region's priciest market, was about in the middle as home sales fell 33.2 percent and the median sale price declined 16.7 percent.